The Career Encouragement Blog

Skills-based Pay vs. Job-based Pay

Ann Bares has a thought-provoking post on whether the predictions that companies in the future will move to skills-based pay vs. job based pay will come true.  Her conclusion is simple:

"Don't write off the job, or job-based compensation systems, quite yet."

And she notes in the comments section that:

"The idea that functional organizations will disappear from the business landscape [feeds] a lot of career misperceptions."

Ann's comments really resonated with me.  So often it seems that much of the career advice out there hypes the notion that in our world of fast/fluid companies, people and team skills are all you need to get where you want to go.  I am concerned that this advice is raising a generation of generalists who don't see the value in specialization. Time bears out that specialization combined with good people/team skills will lead to greater opportunities and greater income for most people. 

Perhaps even more importantly, a strong specialization combined with great people skills will also often lead to better options for work-life balance.  It's easier to ask for flex-time or part-time if your skills are in high demand and your reputation is positive!

Getting the Salary You Want

The Minneapolis Star Tribune quoted me briefly in  "Getting the Salary".  The article is a bit choppy, but the points are basic:

• Have a Salary Range in Mind that you can discuss with business-savvy and professionalism
• Don't expect an employer to be responsible for the cost of your lifestyle.

When should you bring up salary in an interview?

I've posted before about how to respond to recruiters who ask you What is your current salary?  or What are your salary requirements?  But what if the recruiter doesn't bring up the topic of money and you're curious what the salary range is? 

The HR Capitalist examines this issue from the flip side in  When should candidates talk money with an employer?   

Kris advises:

"Here's the golden rule -  If you pro-actively ask an employer about money, ask early and very late in the process, never in the middle. "

Read the rest here to learn why!

Why should you make more than me?

It is no secret that some people are paid more than others in our economy.  Ann Bares has a great post that explains why this inequality is actually fair in a "pay for performance" (read: capitalistic) system.   

Money and Happiness

We all know that more money will not make you happier.  However, I have a personal theory that managing the money you have well will make you happier. 

In my work I have the opportunity to talk to employees about money a lot - negotiating starting salaries, explaining compensation programs, interviewing internal candidates for promotions, etc.  Over time I have noticed that employees who are confident in their personal finances (regardless of what level of the corporation they are at) are able to be more effective in the career development and are better negotiators. 

If you are feeling stressed about your personal finances, I encourage you to take proactive steps to resolve those stresses - your career will benefit in ways that go far beyond what a base salary can give you.  I really enjoying the MSNMoney website on a regular basis to stay motivated to keep my personal finances on track.  Check out How to Save $200,000 in 6 Months as a starter!

How does your salary measure up?

Worried you aren't being paid enough for your hard work?  Check out the Global Rich List and compare your salary to others and see how you rank.

A "Seller's Market" for Employees?

For those concerned about reports of America's Shrinking Middle Class, the Compforce Blog has some good news.  Ann Bares reports that wages are rising and we are entering a seller's market for employees.

How much salary do you need?

One of the things I was taught in a Career Theory class in my MA program, is that for most people, career satisfaction can be broken down into three primary areas:

1. The content of our work
2. The people we work with
3. The money we make

Research shows that people who are satisfied with all three of these areas tend to stay and thrive in their employment situation.  People who are satisfied with two out of the three will likely stay for up to 5 years, but will experience dissatisfaction.  And people who are satisfied with only 1 out of the three are probably actively looking for a job.

Recent concerns over America's Shrinking Middle Class have folks more worried than ever about #3.  I try to remind people of the total package of their employment situation when they complain to me - as many do at this time of year - that they want to make more money.  It's easy to have thoughts such as "I am not being paid enough to put up with this..." without really considering all the other features that make our jobs worthwhile to us.  It can be very disrupting to switch jobs just for more pay, especially when you like the people you work with and the content of your job.

For example, I have a client company that is a non-profit organization with a lofty mission.  Most of the folks who work there are very mission-driven and have sacrificed income in order to work there.  Many of them could make $20,000 or even more elsewhere, but they like what they do, and who they do it with.  Recently one of the Managers there was sharing his dissatisfaction with his salary.  When I began questioning him about his relationship with his co-workers and the work that he did, he acknowledged that although he has interviewed for jobs that pay more, he can't find a situation that he would like better.  So he has decided to be content with his income for now. 

If you find yourself wishing you could make more money in your current situation, and it's just not possible at this time, take a look at this inspiring example.

Are you currently living a lifestyle that is less than you expected because of the work you do?   Leave a comment and tell us how you are making it work!

It Pays to be a Top Performer

It's no secret that the days of "across the board" salary increases are long gone, and pay for performance is here to stay.  According to a recent posting on the Compforce Blog, if you are near the top 10% of employees in your company, your annual increase will be nearly twice as much in 2007.  The trend is definitely pay for performance!

So what does that mean for you?  We all know that working just for the money is a recipe for a long and discouraging career.  So why bother trying to be a top performer?  Because:

1. Top performers also get more interesting and challenging assignments;
2. They usually get more attention from the most competent leaders at the company who can become mentors; and most importantly
3. Top performers have the greatest opportunity to impact the mission and goals of their company.

If you are working for an organization whose mission you believe in, #3 should be a big motivator for you to put effort into growing in your career.  Then the extra salary rewards are just icing on the cake!

What do you think?  Why should people work hard to grow in their careers?  Leave a comment and let us know your thoughts!

Everything is Negotiable - The Story of Maria

A few days ago I told you the story of Steve and encouraged you with two key points:

1. It is up to you to determine what the company can do to make the offer acceptable to you so you don't feel you need to keep looking.
2. Everything is negotiable.

I am delighted to share yet another story where having a having a clear salary range in mind and employing some savvy negotiating produced a great result for the candidate and the company.   About 10 years ago I worked with a bright, competent Project Manager, Maria.  She had been with the company for about 6 years and had progressed well in her career there.  When her first child was born, she made the decision to stay home for awhile.  "Awhile" turned into a second child and about 10 years in total. 

Recently she decided she was ready to go back to work.  As an initial networking step, she called her former boss (Lisa) just to chat about her skills and background, and what Lisa was noticing in the marketplace these days.  You guessed it - Lisa knew of an opening at the company that Maria would be perfect for, and brought her in to meet the hiring team right away.  The job turned out to be a newly created position with a vague reporting relationship and even vaguer metrics, and the title "coordinator."  They offered to the position to Maria at the same salary she left at 10 years ago. 

Maria called me concerned that by "taking the easy way out" and accepting the first job that came along at a company she already knew, she might be shortchanging herself in the long run.  We sorted through the elements of the offer that she liked:  It was at a company she knew and enjoyed, she liked her co-workers there, it would be a nice way to re-enter the workforce, she felt confident she could make a contribution fairly quickly.  And we talked about the elements that were discouraging to her:  it didn't account for inflation since she left the company 10 years ago, the job description was vague and could easily end up becoming a more basic administrative role that didn't fully utilize her talents, and the unclear reporting relationship would make it difficult to sort through these issues once she started.  We also talked about the fact that although negotiating is a hard thing to do - especially if you don't like to talk about money - that if you take a job where you are unhappy with the salary, you are actually shortchanging your employer in the long run.

So Maria got to work and did what she does well.  She used her knowledge of the company and her project management skills to put some more definition around the position and what some reasonable expectations would be.  She researched salary ranges using the salary calculator at hotjobs.com and came up with a figure that was about $15,000 higher than the offer she had received.  Armed with that information, she called her contact back to explain how she saw the role and what a reasonable salary would be...and he agreed!  Further, given the fact that the position still had some lack of clarity around it, Maria also negotiated that the company give her a six month performance and salary review to ascertain that the situation was fair to all.

So here are some key lessons to learn from how Maria handled herself:

• By defining some structure and clarity for the position, Maria added value to the company before she was even hired.  I've seen often with positions like this that hiring managers can get a bit lazy.  They know they "need some help around here" but can't seem to articulate what they want.  An employee who can do that for them is gold.
• By coming into the negotiations armed with facts and relevant market data, Maria was able to diffuse her own nervousness about discussing money and also help allay any defensiveness the business manager might have been feeling.
• By resisting the urge to "take the easy way out" by accepting the first offer, Maria built her own skills, and her own confidence.  This will ultimately help her be a better performer in the position - which is good for her and also good for the company.  It's a win-win!

And an added bonus of how Maria handled herself?  By thinking and behaving like a business person up front, and by not accepting and offer that was effectively 10 years out of date, Maria ensured that the company views her as a talented, contributing business professional and not just "a mom returning to work."

Well done, Maria!